The Fed has achieved both of its central objectives—price stability and financial stability—in only about a quarter of its years of operation. What reforms would be likely to improve that performance? This article focuses on two problems that have plagued the Fed throughout its history: adherence to bad ideas, especially to influence from intellectual fads in macroeconomics, which have produced major policy errors; and politicization of the Fed, which leads it to pursue objectives other than price stability and financial stability. Several reforms are proposed to the structure and governance of the Fed and its policy mandates, which would promote greater diversity of thought and independence from political pressures. This in turn would insulate the Fed from political pressures and make its thinking less susceptible to intellectual fads.